Do you have the right C-Suite?Tough questions CEOs today are asking Heidrick & Struggles Global Functional Practices
Today’s CEOs face challenges
that continue to evolve with
unprecedented speed. Unstable
markets, greater regulation,
heightened public pressure,
impact of social media, new
technology, and data security, to
name a few, all create new areas
of risk and opportunity. More
traditional challenges – supply chain
optimization and the evolution
of shared services, technology,
globalization, and the war for
talent – show no signs of easing.
Competition remains fierce and
customers are more demanding
than ever, putting pressure on
CEOs and their C-suite teams.
Assembling the right team has also grown more
challenging. Based on a recent study conducted
by Harvard Business School in conjunction with
Heidrick & Struggles and Women Corporate
Directors, only a small percentage of boards rate
CEOs ‘high’ on talent selection and development.
The study also shows that boards place talent
management, development and selection as one of
the top responsibilities for CEOs. Historically C-suite
roles, particularly functional roles, were concrete
and contained from the standpoint of required
skills. However today, the skills and competencies
for C-suite roles are no longer so clear. Not only do
they vary from organization to organization, but
responsibilities and thus competencies for the roles
themselves are starting to bleed into one another.
For example:
• Chief Financial Officers (CFOs) are no longer just
bean counters – they play a major role in helping
manage a wide range of risks. The best are valued
strategic partners to the CEO.
• Chief Information Officers (CIOs) are no longer
focused primarily on pipes and plumbing:
they are integral to strategy, security and
risk management, and how companies and
customers interact.
• The Chief Human Resources Officer (CHRO) is no
longer an administrative role. Top human capital
leaders are required to have deep understanding
of the business and its strategic objectives to
anticipate talent requirements for the future
at every level of the organization as the supply
decreases and the complexity of managing a five-
generation workforce increases.
Do you have the right C-Suite?TOUGH QUESTIONS CEOs TODAY ARE ASKING
2 Do you have the right C-Suite? Tough questions CEOs today are asking
• A good Chief Marketing Officer (CMO) needs
to have a solid grasp of new e-commerce
technologies and a strong grounding in analytics.
• A Chief Supply Chain Officer (CSCO) needs the
financial skills to understand price fluctuations,
hedging, and forecasting, a firm understanding
of the ever-changing regulatory environment to
deal with sustainability issues, and the savvy to
turn sustainability to business advantage.
Today, the requirements for all members of the
Executive team are that they understand the
business, the competitive environment, financials,
and how the company generates value. They
must understand how their particular area of
responsibility impacts the organization and be able
to reach across their functional silos to find the right
solutions for the company as a whole. Corporate
Executives (CXOs) must be focused on driving
both top and bottom line value and demonstrate
return on investment for the functional activities
they oversee, especially in an era of extreme cost-
consciousness.
Finally, all of this ambiguity about roles and
responsibilities means that everyone in the C-suite
must be a consummate communicator who can
succinctly articulate how the company’s strategy
translates into specific actions. People skills are
critical, and CXOs must be team builders and
mentors, focused on assembling the talent that can
ultimately succeed them.
CONTENTS
Introduction, 2
What should CEOs be asking their:
Chief financial officers? 4
Chief information officers? 6
Chief human resources officer? 9
Marketing and sales leaders? 12
General counsels? 15
Chief supply chain officers? 18
Conclusion – A higher bar, 21
Many CEOs who build nimble and highly
collaborative executive teams note that
the strength of the team interaction, as
well as each individual’s specific capability,
is a critical contributor to their and the
company’s success. But pulling together this
kind of talent takes considerable attention
and vigilance. In this paper we explore what
questions CEOs should be asking each of six
‘chiefs’ – CFOs, CIOs, CHROs, CMOs, General
Counsels and CSCOs – to ensure they are
building an executive team that is prepared
to meet not only today’s challenges, but
those that are looming over the horizon.
Heidrick & Struggles 3
What should CEOs be asking their chief financial officers today?
Do you have the right C-Suite?TOUGH QUESTIONS CEOs TODAY ARE ASKING
Few roles have expanded as extensively
over the past decade as that of CFO. In
addition to being a rigorous financial
strategist and steward, today’s CFO
provides direction on everything from
capital structure and tax positions to
acquisitions and entering new markets,
helps drive innovation through new
business models, continually analyzes
the deployment of capital and considers
operational changes to enable growth,
manages an increasingly wide range of
risks, and communicates more often and
more effectively with investors. At the
same time, the CFO must maintain the
appropriate level of independence in
order to deliver the hard-nosed, objective
advice the CEO needs. A CFO who can
strike the right balance – acting as a
commercially-oriented strategic advisor
without sacrificing exceptional financial
oversight – can be a game-changer for
the organization and an invaluable asset
for the CEO.
Today, that collaboration calls for answers to
questions given new urgency by a turbulent global
economy, new growth opportunities in emerging
markets, endangered profitability in developed
markets, and widely varying challenges in business
environments, regulatory regimes, and talent
distribution. A few of the most pressing questions
include the following.
What are we doing to enable growth in a stalled economy without taking on unacceptable levels of risk? Today’s CFOs are risk managers in the truest sense.
While still exercising careful financial judgment,
they must be comfortable with some level of risk
in order to facilitate value creation in an economy
and operating environment that have made
growth extremely challenging. If the CFO considers
an opportunity too risky, just saying no is not
sufficient. Instead, CFOs should be prepared to
propose alternative ways of deploying capital for
competitive advantage. In the allocation of capital,
they must balance rapid growth opportunities in
emerging markets against the imperative to protect
the company’s position in slow-growth developed
markets. They must provide internal and external
stakeholders with rigorous and transparent business
cases for such decisions. And they must do so in
the face of a genuinely global playing field where
4 Do you have the right C-Suite? Tough questions CEOs today are asking
risk is inherent and opportunities involve complex
challenges from disruptive innovation to cultural
differences to unforeseen competition.
All of this requires of CFOs an unprecedented
degree of commercial savvy, from business model
innovation to careful assessment of organic,
operationally-driven growth versus growth through
acquisition, to the creative use of analytics to help
strengthen customer relationships. At the same
time, along with the CEO, the CFO must be able to
assure the board that the entire enterprise is being
run soundly, that it is maintaining cost-effective
access to capital, carefully managing continually
changing risk profiles, and satisfying various classes
of investors.
How do we prudently grow in emerging markets?As CEOs increasingly look to emerging markets for
growth opportunities, they will need to be sure that
their companies have rigorous controls in place.
Financial, regulatory, or legal missteps in any market
can do great damage – to a company’s reputation,
its stock price, and its ability to continue to grow
in a market where it has stumbled. Companies
may be especially vulnerable to such missteps in
markets where accounting standards, business
practices, and the regulatory environment differ
from those in developed markets. The CFO must
reach across the organization and not only establish
effective controls in all geographic regions but
also communicate the strategic and operational
relevance of those controls.
Are we telling a compelling story to the investment community?With the investment community, it is no longer just
about the numbers. The best CFOs are able to speak
commercially about strategy, business opportunities,
and authentically tell the company’s story – how
it makes money, deploys capital, and pursues its
strategic objectives. They are able to identify and
explain risks and go beyond reporting requirements
to provide investors with a coherent narrative of
the company’s performance and prospects. To build
stakeholder confidence, they report more frequently
and communicate more often with investors. They
effectively complement the CEO’s telling of the
company story while finding the right balance
between representing the company and seeing the
company through an investor’s lens.
Have geographical investments in talent been factored into our long-term strategic plans?As dramatic shifts in the distribution, availability, and
nature of talent occur unevenly around the world,
finance executives will need to be as well-versed
in talent developments worldwide as they are in
interest rates and raw material costs. CFOs who can
rethink the workforce in terms of the geography of
talent as well as the geography of cost make more
informed financial decisions, achieve more nuanced
long-term planning, and provide the real strategic
value that CEOs have come to expect of them.
ConclusionAs both a strategic partner to the CEO and as a
careful steward and architect of the company’s
financial resources, the CFO must be able to make
complex judgments, marshal data as well as bring
business acumen to bear, and achieve a fine balance
of risk and opportunity. In fact, as the answers
to today’s most pressing questions suggest, the
CFO can best achieve that balance by thoroughly
integrating the two aspects of the chief finance
role, with strategy informing stewardship and
stewardship advancing strategy. CEOs expect
no less. n
Heidrick & Struggles 5
What should CEOs be asking their chief information officers?
Do you have the right C-Suite?TOUGH QUESTIONS CEOs TODAY ARE ASKING
Compared to even 10 years ago, the
impact of technology and of data has
changed dramatically. Technology today is
the lifeblood of many businesses. Working
well, it can help drive revenue, business
operations and even culture. Working
poorly, it can ultimately put a company
out of business. The speed of entrance
into the digital age has put tremendous
strain on IT organizations and the systems
themselves. Many organizations are
challenged to keep up with expectation
while protecting the quality and integrity
of the systems themselves.
When it comes to understanding how information
technology can transform organizational processes,
create customer intimacy, make employees more
productive and establish competitive advantage,
the CEO turns to one member of the executive
suite: the CIO. Given the enormous operational and
strategic importance of IT today, CEOs need a top IT
advisor who understands the business as well as the
technology and can answer these critical questions.
Are our data and information systems truly secure?With more and more sensitive information –
financial, health, and personal – being transmitted
electronically, companies are at the mercy of
the latest hacker or malicious virus. The risks are
multiplied by social media, cloud computing, mobile
devices and increasing employee needs for access
to company data from any location. A computer
breach has the potential to take down an enterprise,
cause substantial financial and productivity losses,
and damage the company’s reputation. According to
PwC’s Global State of Information Security Survey 2013,
52% of executives said that they had lost customers
due to inadequate information security. Clearly, CIOs
need to ensure that technology and processes are
in place to protect customer data and all intellectual
assets, to guard against cyber-attacks, and to
prevent failures in mission-critical and customer-
centric applications.
6 Do you have the right C-Suite? Tough questions CEOs today are asking
Are we doing everything we can to use technology to enhance the customer experience? As the executive who oversees more customer
touchpoints – from e-commerce, social, mobile
and websites to customer data collection to back-
end order processing – than any other executive,
today’s CIO should partner closely with the Chief
Marketing Officer. CEOs are looking for CIOs who
embrace the customer-centric nature of the role
and can proactively offer new ideas for everything
from improving customer analytics to enhancing
the company’s customer relationship management
system to implementing technologies that support
customer intimacy.
Are we focusing on deploying IT resources efficiently?At a time when the appetite of all functions for IT
outstrips the resources for delivering it, the CIO’s
ability to prioritize is crucial. The CEO needs a CIO
who can make go/no-go decisions based on a broad
understanding of business objectives, coupled with
rigorous ROI analysis. For those businesses whose
projects don’t make the cut, a CIO needs to be able
to both explain the rationale for the decision and to
propose alternate solutions.
There may also be opportunities to either outsource
IT-intensive areas such as data centers, call centers,
or back office processing or to move certain
functions to the cloud. The CIO must understand
which areas are critical to the company’s mission,
act as a trusted advisor to the CEO to help assess the
trade-offs, security risks, and business advantages of
outsourcing and be able to make the business case
for a particular deployment of IT-intensive activities.
Are we missing opportunities to integrate our systems? Few organizations have avoided the problem of
legacy systems developed within functional or
geographic silos that now need to communicate
with one another but can’t. Add to that the
challenge of integrating diverse platforms inherited
through mergers and acquisitions, and the CIO
faces a task of enormous complexity. Integrating,
upgrading, or replacing IT systems means more
than just swapping out one technology for a
new one. Such initiatives call for major process
changes that tend to be underestimated by the
business. It is up to the CIO to anticipate the type
and magnitude of these changes and to serve as a
change management coach to business leaders –
preparing them, advising them, and helping them
develop new processes. Through an understanding
of business needs and how people work, the CIO can
also stay one step ahead by proposing ways to build
flexibility into new systems.
How can we harness IT to help grow the business? Many of the most successful companies recognize
IT as a commercial advantage when entering new
markets, launching new businesses, and delivering
products and services more effectively. Recently, we
have seen a number of companies replace long-
standing CIOs with individuals who are visionaries
rather than order-takers and who understand how
technology can serve as a growth engine. CEOs
who do not view their IT organization as a business
enabler are increasingly on the lookout for leaders
who can quickly lead them forward.
Heidrick & Struggles 7
Where are we vulnerable? Business history is littered with extinct companies
that were swept away by new technologies
that enabled innovative business models and
lowered barriers to entry. Examples abound: the
disintermediation of travel agents by the Internet,
the upending of the music industry by iTunes,
and the revolutionizing of bookselling, publishing
and, ultimately, all of retail by Amazon. Today’s CIO
must be able to see technology-enabled threats
on the horizon and bring together the resources
to brainstorm new and innovative ways that the
company can turn a threat into an opportunity and
disrupt the disrupter.
ConclusionAs these questions suggest, the CIO’s responsibilities
are vast. They have changed dramatically in the last
10 years and this shows no signs of abating.
To master it all today’s CIO must bring to the table
not only business and IT savvy, but also strong
communications and collaboration skills, a global
mindset, innovative thinking, and an ability to
manage and champion change. Above all, the
CIO serves as the company’s resident futurist,
delivering a unique perspective on how information
technology is changing the world and how it can
be harnessed to yield both value and competitive
advantage. n
8 Do you have the right C-Suite? Tough questions CEOs today are asking
What should CEOs be asking their chief human resources officer?
Do you have the right C-Suite?TOUGH QUESTIONS CEOs TODAY ARE ASKING
As companies recognize that talent is
the most powerful lever for achieving
competitive advantage, no role in the
C-suite has been transformed more
and has delivered more impact on the
business than the Chief Human Resources
Officer (CHRO). Like the CFO, today’s
CHRO plays a pivotal role in driving the
CEO’s agenda. Responsible for what is
often the company’s biggest investment
– its people – the CHRO works at the
intersection of strategy and the means
to execute it, anticipating where the
business is going and making sure that
the organization has the talent to take
it there. As the CEO’s trusted advisor,
the CHRO needs to artfully balance this
expectation with their role in supporting
the board’s compensation, nominating
and governance committee around total
rewards, succession planning and talent
risk management.
The skill set needed today in top CHROs is broader
and more strategic than in the past. CEOs who
understand that talent can be the ultimate make-or-
break factor in their success are asking CHROs a new
set of questions.
What are we doing to ensure that we have the right talent as our strategy and business objectives evolve?Hard data demonstrates the magnitude of the
talent challenge CHROs and their organizations
will face in the next several years. The supply of top
talent capable of assuming key global leadership
opportunities is dwindling due to changing
demographics, while the demand for new skill
sets is increasing. With the lack of investment in
talent development in recent years due to budget
constraints across many industries, access to specific
talent pools, particularly with developed leadership
skills, is significantly more competitive. In addition,
demand for top talent with global experience is
increasing as Asian conglomerates now compete
with Western multinationals for outstanding people
and private equity and venture challenge corporate
behemoths for innovative leaders. An open talent
economy is also developing in which workers are
increasingly choosing a work style convenient for
them. In this volatile and uncertain environment,
many companies want to have more control over
their strategic talent needs, making development,
Heidrick & Struggles 9
retention, and engagement more critical than ever.
CHROs have to drive these internal capabilities
while competing successfully for strategic hires
in an increasingly difficult market. As a result, the
CHRO must demonstrate a strong business acumen
to engage deeply and proactively with strategy
and deliver high-impact, genuinely strategic talent
management. While increasingly many CHROs
describe themselves as business people first, the
CEO should test the CHRO’s level of true business
acumen. Does the CHRO start the conversation with
the strategic objectives? Though it is often said that
the CHRO should be a strategic partner, those that
have truly demonstrated this capability remain the
minority.
What are we doing to ensure that our talent management practices drive desired business outcomes?Outstanding CHROs integrate all of the elements
of talent management – recruitment and talent
acquisition, training and leadership development,
performance management, total rewards, retention
strategies, succession planning – into a talent
management architecture designed at every point
to further the objectives of the business, now
and in the future. An integrated, strategic talent
management system aligns key activities with each
other, the business, and the internal and external
markets for talent and supports the business with
the right internal and external talent, at the right
place, at the right time, in order to translate strategy
into effective action. The CHRO must engage every
leader, especially the CEO, as a part of the talent
management cycle to continuously assess business
dynamics, outcomes and future strategies in the
context of talent.
Do we really know what drives the high-performance, high-engagement culture we need to compete as an organization?As creators and custodians of the culture, the CEO
and CHRO need to exemplify the hallmarks of
the desired values and objectives of the business.
Reputation and brand are being impacted by
social media, further driving the importance of
alignment about what is said and what is done. The
CEO and CHRO need to be sure that performance,
engagement, the employee brand and other
elements of an integrated talent strategy are
measured and managed in a way that best promotes
the desired culture. Given the multi-generational
workforce and the increasing global nature of
business, there are also increased complexities
around building a common culture in this diverse
world. There are few other areas in HR that are in
greater flux today than this work of culture shaping,
which impacts the competition for talent, as well as
the drivers of engagement and retention. Cutting
edge CHROs are introducing analytics and diving
into ‘Big Data’ to determine with as much precision
and depth what motivates, engages, and inspires
their employees. At the same time, they are applying
the insights of social science to put that deeper
understanding of their people to work throughout
the organization. And they are returning to, and
refining, the face-to-face, personal management of
performance that was displaced in recent years by
online performance management systems. CHROs
who have mastered these rapidly advancing and
potentially revolutionary disciplines will achieve
synergies of culture and strategy that will make less
sophisticated HR operations look as quaint as the
Personnel Departments of yesteryear.
10 Do you have the right C-Suite? Tough questions CEOs today are asking
Are we identifying and addressing the multiple risks associated with human capital? Because HR is at the center of many of
today’s hottest governance issues – executive
compensation, compliance, and succession planning
– today’s CHRO must be a knowledgeable and
trusted advisor to the CEO and to the board. In that
capacity, the CHRO must increasingly understand
and address risks related to those issues – the
risk of falling behind in needed talent, the risk of
non-compliance in an environment of escalating
regulation and external scrutiny, and the business
risk in sub-optimal workforce and succession
planning, compensation practices, and corporate
governance. Vigilant CHROs clearly identify such
risks, proactively advise and mitigate them, and
seek to create the infrastructure, processes and
procedures that will provide needed information
and data while ensuring culture that minimizes
these risks.
What are we doing to manage diversity, including diversity of thought and the innovation it generates, in a global and demographically diverse workforce? Diversity is no longer a numbers game focused
on optics or even compliance, but an urgent
operational and strategic challenge. How does a
company that faces a fi ve-generation workforce, a
global business environment, constant technological
transformations, instant communications, and/
or disruptive innovation from any corner ensure
success? Developing and executing a people
strategy in such a complex environment requires
a broad appreciation of these issues. CHROs must
not only bring business acumen, but also cultural
sensitivity toward generations and geographical
diff erences, a fi rm grasp of global operating models
and the knowledge of international employment
laws and regulations. They must understand that
the technologies that enable working across time
and space impact culture and work style. They
should also see that ‘business as usual’ will not be
the norm of the future, valuing diversity of thought
in the service of creativity and innovation. These
capabilities will be critical in creating a corporate
culture that generates the maximum business
advantage over the long term.
ConclusionWith so much riding on the quality of increasingly
scarce talent, CEOs need their CHRO partner to
have skills and competencies much like their own:
business acumen, strategic insight, market savvy,
and the ability to lead and manage change in
this increasingly complex environment. With this
dynamic environment as the ‘new normal,’ talent
becomes the most critical element in business
success. The HR executive stands at this intersection
of strategy and execution to provide the leadership
in driving critical business activities in the areas
of building organizational capability, scaling for
operational effi ciency, achieving alignment and
affi liation, and managing human capital risk,
integrating fully into every aspect of business
operations to drive performance. n
Heidrick & Struggles 11
What should CEOs be asking their marketing and sales leaders?
Do you have the right C-Suite?TOUGH QUESTIONS CEOs TODAY ARE ASKING
The competitive playing field changes
almost yearly, and if CEOs cannot
ensure that their marketing and sales
leadership changes with it, they will see
their company rapidly outpaced in the
marketplace. From digital to mobile to
‘Big Data’, new technologies and new
marketing and sales disciplines emerge
with bewildering speed. Yesterday’s
cutting edge quickly becomes tomorrow’s
price of entry. CEOs need to be sure
that their commercial leadership puts
them at a competitive advantage in this
volatile world, that marketing and sales
are demonstrably creating shareholder
value, and that they are prepared to bet
the company on their prowess. They
can begin by asking one fundamental
question.
Do we have the right mix of marketing and sales for the new world that continues to emerge?In many industries, and according to whether a
company was B2C or B2B, enterprises have been
primarily marketing-driven, sales-driven, or in some
cases balanced. But with economic uncertainty,
new technologies and channels, and globalization’s
annihilation of time and space, every company
must newly question where on the marketing-sales
spectrum it should be positioned. New realties have
overturned old marketing models as well as old
sales models. What worked yesterday in a company
or an industry may not work tomorrow. CEOs must
consider carefully whether their organizations
have the right orientation and, if not, whether
their commercial leadership is equipped to lead
marketing and sales in new directions.
Depending on how CEOs assess where their
companies are – and should be – on the marketing-
sales spectrum, their subsequent focus will vary.
For marketing-driven enterprises, critical questions
include the following.
12 Do you have the right C-Suite? Tough questions CEOs today are asking
How can we be sure that marketing is driving shareholder value?With the rise of multiple new media and the
eclipsing of the mass advertising model, marketing
leaders face vastly more complex challenges. They
must be able to allocate marketing spend in a far
more sophisticated way. They must know how to
target and reach customers in many media. And they
must be able to measure the return on investment
of all of these disparate elements and draw a straight
line to shareholder value. CEOs must insist that their
marketing leadership be capable of connecting
those dots.
The increased demand for analytical, strategic
marketing leaders represents a major shift from
the days of leaders focused only on branding,
advertising, and the other creative aspects of
marketing. Does the CMO think only like a marketer
or more like an officer of the company?
Do we really know how to put market and customer insight to work?Traditionally, companies that could excel at one
of three tasks – innovation, efficient operations, or
customer intimacy – could prosper. But because
innovations today can be almost immediately
imitated and most companies operate as leanly
as possible, the real differentiator has become
customer intimacy. Leveraging the unprecedented
amounts of customer data now available, companies
must get to know their customers and prospective
customers as never before. Does the marketing
leader know how the customers define value?
How to quarry actionable customer insights from
customer tracking, social media, and ‘Big Data?’
How to help translate insights into products and
services that raise barriers to competition and help
retain current customers and attract new ones? Most
importantly, how can a company be sure that it is
genuinely achieving that intimacy?
Where do we stand relative to our competitors?The ability to track and understand the moves of
rivals, to scan the horizon for potential new entrants,
and to foresee and address market disruptions
have become indispensable weapons in the arsenal
of today’s CMO. The CMO must build a robust
competitor tracking capability that both informs the
strategic planning process and directs marketing
and sales initiatives. These initiatives must in turn be
flexible enough to shift gears when new information
surfaces – often in real time, rather than in the
annual marketing planning cycle. CEOs must ask
how vigilant and, just as importantly, how agile their
marketing leadership is.
The economic turbulence that took us into the
second decade of the 21st century, coupled with the
rise of new technologies and channels, dramatically
changed the sales-driven model. Gone are the days
of glad-handing, of the ‘shoeshine and the smile’
of the old-style sales rep. For companies that are
primarily sales-driven, today’s critical questions
include:
How well prepared is my sales organization to deliver what is needed to achieve our strategic goals?Over the past two decades, the electronic
disintermediation of sales people, the
professionalization of purchasing departments, and
a multiplicity of sales channels have eroded the old
uniform sales force model. Economic uncertainty
completed the process, leading companies to
seek sales leaders who are far more strategic in
orientation and who bring the skills of general
management to the role. They are expected to pull
sales out of its silo and to manage sales as a portfolio
of channels: electronic, mobile, inside sales team, call
centers, and third-party distributors. It is critical that
Heidrick & Struggles 13
companies have the right portfolio relative to their
strategies, and that the sales leader demonstrates
how that mix will generate the growth the company
is seeking.
How effective is my sales leadership in making the sales function a repeatable process and not a collection of individual relationship managers?Sales has been transformed from an art dependent
on individual star power on the front lines into
a science requiring more analytic and strategic
competency at the top. Instead of riding herd on a
collection of sales superstars, today’s sales leader
establishes repeatable processes – from onboarding
new team members to analyzing sales results –
that make sales success scalable throughout the
organization. Has the sales organization embedded
repeatable processes throughout its operations or
does it rely on outmoded processes that depend on
individuals?
When we win, why do we win? When we lose, why do we lose and to whom?Because a sale creates the fastest ROI, companies
understandably rely on the function to deliver
profitable growth. But CEOs cannot systematically
grow their businesses unless they know why they
won or lost. How did your sales & marketing team
convert a prospect into a customer? Why did the
team lose a long-time customer? Why are sales
declining in one geography and growing elsewhere?
The too-easy answer is almost always price – an
unacceptable response unless a company accepts
the death spiral toward lowest-cost provider.
CEOs need real answers, not rationalizations. Sales
leadership must provide deep insight – through
sales analytics, the voice of the customer, and
market and competitor analysis behind wins and
losses. Do they generate actionable information that
enables the company to refine its value proposition,
grow sales and margins, improve sales forecasting,
smooth demand planning and – most importantly –
compete on value instead of price?
ConclusionHaving made a conscious choice about where
a company should be on the marketing/sales
spectrum and having then asked the relevant
questions, the CEO should have a clear idea of
whether or not the right commercial leadership
is in place. If it is, the company is well prepared
for a future in which customers will wield more
power and choice than ever. If a company lacks
the right commercial leadership, however, CEOs
should be aware that on both the marketing and
the sales side the demand for analytic, strategic
leaders far outstrips supply. The factors that have
upended old marketing and sales models have
emerged so recently that many senior leaders are
handicapped from having grown up with the old
models. Meanwhile, some of today’s most talented
commercial officers are moving out of the function
and into general management and even CEO roles.
Despite these difficulties in filling commercial
leadership roles, no company can afford to get it
wrong. n
14 Do you have the right C-Suite? Tough questions CEOs today are asking
What should CEOs be asking their general counsels?
Do you have the right C-Suite?TOUGH QUESTIONS CEOs TODAY ARE ASKING
The role of the General Counsel (GC) has
evolved dramatically in the past decade,
now attracting some of the best and the
brightest in the legal profession. At the
same time, CEOs have come to rely more
heavily than ever on their GCs for support
and guidance in the face of increasing
regulation, shareholder activism, and
government and public scrutiny. Boards
have started paying attention as well:
where once only the CEO was involved in
recruitment of the GC, today it is unusual
for candidates not to be interviewed
by at least one or two members of the
board. With so much riding on the GC’s
effectiveness, CEOs understandably
expect answers to the following
questions.
How can the GC play a role in the overall success of the company? CEOs are looking for someone who can not only act
as a trusted legal advisor of impeccable integrity,
but also act as a valued business partner. In addition,
the GC should be able to work collaboratively with
the senior executive team to achieve business goals
– thinking like a principal, not an agent, as outside
counsel might – and contribute to company success
both as a technical legal expert and as a business
generalist.
The GC can play a particularly valuable role in
company success when it comes to the many risks
organizations face – legal, regulatory, reputational,
financial, and operational – not only in the home
country but around the world. Today’s GC needs
to be able to help determine where the company
faces the greatest risks, how multiple risks interact,
and how those risks can be mitigated. Instead of
simply controlling every risk at the expense of
the organization’s mission, the business-savvy GC
operates within a framework of acceptable risk,
helping the CEO weigh the benefits and drawbacks
of different courses of action and when obstacles
arise, helping develop alternatives that advance
business goals.
Heidrick & Struggles 15
Recognizing also that behavior need not be illegal
to be unethical or the wrong business decision, the
GC must go beyond ‘Is this legal?’ to ask ‘Is this right?’
He or she must have the professional judgment
to advise the CEO and the board about gray areas,
with an eye toward how business practices will
actually be perceived and how they may aff ect the
company’s reputation.
What is the status of our relationships with regulators?Much of the GC’s time is spent developing
solid relationships with regulators and industry
watchdogs – entities like the Department of Justice,
the Financial Industry Regulatory Authority, and the
Securities and Exchange Commission. The ability
to navigate Washington and to work with state
governments is especially important in heavily
regulated industries like healthcare, fi nancial
services, and energy but is also increasingly relevant
to GCs in more lightly regulated industries as well.
The GC needs to be familiar with an ever-increasing
body of regulations and counsel the CEO and the
board about compliance issues. It is also essential
for the GC to stay abreast of any pending legislation-
-domestic and global – so that the company can
develop compliance strategies well in advance. The
genuinely government-savvy GC not only knows
how to interact with policy makers and deal adroitly
with regulators, but also how to proactively translate
government policy into business implications for
the company.
Is our IP suffi ciently protected?In a knowledge-based economy, protecting
intellectual property (IP) is a key way GCs deliver
value to their organizations. But challenges abound.
For example, IP theft is a common. The explosion
of electronic communication places competitive
knowledge at the mercy of industrial hackers or
even the inadvertent email of a careless employee.
Today it is not uncommon for employees to change
jobs every few years and take intellectual property
and corporate secrets with them. While IP protection
has always been a part of the GC’s job – whether it is
fi ling patents, drafting air-tight contracts, reviewing
partnership and outsourcing deals or simply
educating employees about protection practices –
the stakes today are higher than ever.
Are we keeping our legal costs under control? The trend of outsourcing the most important legal
work has begun to reverse. Costs have escalated to
the point that executives and boards are questioning
how to contain outside legal spend. Further, GCs are
starting to assemble in-house teams of specialists
who are often better-equipped to handle the
work. As a result, the GC must possess outstanding
management skills, including the ability to develop
talent, plan for succession, and direct a global team.
GCs are not only building strong in-house legal
teams, but they are also negotiating lower fees
from the outside fi rms they engage. Corporate
legal teams are saying no to time-based billing and
negotiating alternative payment arrangements that
discourage ineffi cient work practices. Others have
become even more creative, developing strategic
alliances with outside fi rms and establishing
fi nancial incentives based on value and quality of
work delivered.
16 Do you have the right C-Suite? Tough questions CEOs today are asking
ConclusionFor the General Counsel, who must have a strong
working relationship with the CEO but whose client
is ultimately the company, these new expectations
require a delicate balancing act as well as a wide
range of leadership abilities. But if the position
has become more demanding, it has also become
more interesting to the best and the brightest legal
practitioners, who are increasingly drawn to a role
that allows them to exercise the full range of their
competencies and make signifi cant contributions to
the success of the business. n
Heidrick & Struggles 17
What should CEOs be asking their chief supply chain officers?
Do you have the right C-Suite?TOUGH QUESTIONS CEOs TODAY ARE ASKING
The Chief Supply Chain Officer (CSCO)
combines abilities rarely found in a
single executive. Today’s CSCO oversees
planning, procurement, manufacturing
operations, and logistics. The best of them
are business-focused strategic thinkers
who also live and breathe process, master
systems thinking, and manage complexity
while seeking to reduce it. They also
collaborate across functional and
geographic areas and develop mutually
beneficial relationships with suppliers and
customers alike. As strategists they wring
costs out of the supply chain and help to
grow the top line.
What should we manufacture and where?This question goes to the heart of the CSCO’s
role, and the answer is far from simple. A decade
or so ago many companies moved to outsource
production and sourcing to countries with low-cost
labor. But today such a decision may be ill-advised
because of the many factors at play, including
the business climate and business practices in
supplier countries, quality issues, delivery times, and
incentives to manufacture goods in-country. Driven
by the need to have supply alternatives, many
companies have begun to diversify their supply
and manufacturing locations. Thus, the CSCO must
present an optimal mix and location of outsourcing,
near-shoring, and in-house manufacturing options
to the board, CEO, and the rest of the executive
leadership team.
What externalities will most likely affect our supply chain and how are we planning for them?As the 2011 earthquake in Japan and floods in
Thailand demonstrated, external events can
seriously disrupt supply chains and threaten entire
industries. In Japan the auto industry suffered
huge production disruptions, while the Thai floods
affected numerous suppliers in the electronics and
automotive industries, causing delivery delays of
18 Do you have the right C-Suite? Tough questions CEOs today are asking
parts for up to two months. While CSCOs can hardly
predict these disasters, supply chain disruptions
highlight the need for CSCOs to identify alternative
sources for parts and raw materials.
Not every business disruption is unpredictable,
however. Vigilant CSCOs stay on top of information
from around the globe – from political unrest,
material shortages, fluctuations in commodity
prices, industry takeovers to new taxes and
regulations. They can then determine how these
developments might affect the supply chain
and ensure that it remains agile when major
disruptions occur.
Are we leveraging both cost reduction and top-line growth opportunities in the supply chain?For most companies, the cost of goods is the biggest
contributor to total costs. Focusing on lean and
efficient operations, top-performing organizations
are reducing waste, conserving resources, lowering
processing costs, reducing inventory and achieving
higher asset utilization. The result: decreased cost-
of-goods-sold and higher margins.
But CEOs want CSCOs to take this one step further
and identify ways to use the supply chain as a
strategic weapon. Companies can command a
distinct competitive advantage if they are able to
create a fully integrated end-to-end supply chain
that gets goods into the hands of customers faster.
This works not only for perishable products like
groceries, but also for products with a short life cycle
or price-sensitive demand especially in industries
susceptible to imitation like fast-fashion retail giants.
Are we responding quickly enough to the needs of our customers?Companies that focus only on cutting operating
costs will likely fall behind savvier competitors
whose CSCOs understand that customers are
calling the shots. Customers want the very latest
in products and services – now. Responding to the
‘voice’ of the increasingly demanding customer
was once the exclusive responsibility of the Chief
Marketing Officer. It has now become part of the
CSCO’s job as well.
Outstanding CSCOs work tirelessly to shorten the
cycle time needed to get products into the hands
of customers. They implement technologies to
monitor supply chain effectiveness and to track
product delivery. They employ today’s unparalleled
information visibility to increase efficiency, reduce
waste, and achieve greater response time reliability
for customers. They know also that improved lead
time reliability requires the right distribution and
logistics partners, the right level of safety inventory,
and highly reliable manufacturing processes.
While technology facilitates customer choice and
customer collaboration, it has also added complexity
to the supply chain and presented CSCOs with
additional headaches. However, CSCOs who design
and implement customer-centric supply chains can
reap substantial benefits in the form of increased
market share.
Are our supply chain practices consistent with today’s best practices in sustainability?Pursuing sustainability, social responsibility, and
‘green’ practices in the supply chain can reduce
waste, satisfy regulators, enhance the brand, and
win over customers. It can also attract investors who
increasingly view sustainability as an issue of the
Heidrick & Struggles 19
sustainability of the company itself. Many companies
are not only adopting best practices, but urging their
suppliers to do the same. The CSCO must therefore
not only understand the complex dynamics and
business benefi ts of sustainability, but also be able
to communicate them to supply chain partners.
ConclusionComplex, global time-sensitive supply chains and
their increasing strategic importance have raised
the bar for CSCOs everywhere. Across industries,
they must create supply networks that can respond
to changing markets and conditions with agility,
improved quality, and be able to penetrate new
channels as well as increased velocity of products
and services to customers. At the same time, they
must stay on the cutting edge of new advances in
supply chain methods and technology solutions,
using them not only to cut costs but to increase
value. Companies with Chief Supply Chain Offi cers
who can achieve and maintain that demanding
balance – driving operational effi ciencies while
exceeding the relentless demands of customers
and consumers – can greatly outshine their industry
peers and provide signifi cant value. n
20 Do you have the right C-Suite? Tough questions CEOs today are asking
Conclusion – A higher bar
Do you have the right C-Suite?TOUGH QUESTIONS CEOs TODAY ARE ASKING
Top management teams and their members are like no other group in
the organization. They have overarching strategic responsibility for the
enterprise; they must drive results while also managing change and
promulgating corporate culture. Individual team members must maintain a
complex balance between enterprise and functional concerns.
They must both work as corporate citizens to drive
enterprise success, and lead teams that have more
narrowly defi ned missions. They must represent
their areas’ interests at the top table, and also drive
alignment through their areas as a result of top-
down direction-setting. They must provide the CEO
with multiple perspectives – on markets, mitigating
risk, customers, suppliers, partners, employees,
regulators, governments, and local and global
communities. Above all, they must be leaders.
In our recent work with CEOs in recruiting and
developing eff ective executive teams, we have seen
the bar rise dramatically for these critical roles – with
broader responsibilities, more exacting disciplines,
and far more complex internal and external
challenges. Not surprisingly, the demand for these
increasingly multi-talented leaders far exceeds the
supply. Fortunately, however, we have also worked
with many CXOs who have thoroughly grasped the
new world in which they must operate and have
kept themselves well ahead of today’s steep
learning curve.
Unhampered by functional blinders, they are adept
at capturing business value in all of their activities,
communicating across the enterprise, and providing
the CEO with real strategic partnership. CEOs who
have assembled teams that meet these stringent
new standards can rest assured that their backs are
covered and that they can sleep easier as a result. n
Heidrick & Struggles 21
Global Functional Practices
22 Do you have the right C-Suite? Tough questions CEOs today are asking
Our Global Functional Practice team harnesses the
collective expertise and insight of over 40 dedicated
consultants globally to provide exceptional executive
talent and assessment within the C-suite.
Executive management roles including Finance / CFO,
Human Resources / CHRO, Information Technology / CIO,
Legal, Risk, Compliance & Government Aff airs; Marketing,
Sales & Strategy; and Supply Chain & Operations. We
seamlessly combine our unparalleled search resources
with a deeply consultative approach to best understand
our clients’ hiring needs and to develop ideal candidate
profi les against an organization’s unique competitive
challenges, business objectives, and leadership culture.
Our work and services have earned us outstanding
client satisfaction ratings and created long-standing
relationships marked by the trust we develop and the
results we deliver with every unique engagement.
www.heidrick.com
Heidrick & Struggles 23
Heidrick & Struggles is the premier provider of senior-
level Executive Search, Culture Shaping and Leadership
Consulting services. For 0 years, we have focused on
quality service and built strong leadership teams
through our relationships with clients and individuals
worldwide.
www.heidrick.com
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